The Department of Finance (DOF) has turned down the idea of suspending the excise tax on fuel to aid certain sectors despite the continuous rise of oil prices globally and locally, arguing it could deplete the government’s funds for its COVID-19 pandemic response.
Based on a report by The Philippine Star, Finance Sec. Carlos Dominguez III asked Congress to allow Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law to work, specifically the provision for the automatic suspension of excise taxes on petroleum products.
Dominguez’s statement comes after House Deputy Speaker and 1-PACMAN partylist Rep. Michael “Mikee” Romero has appealed for a special session for lawmakers to deliberate on proposed measures to reduce fuel prices.
While Dominguez understands where Romero and other lawmakers are coming from, the secretary said that the fiscal reforms saved the economy from spiraling during the pandemic.
Under TRAIN, collections of fuel excise should be suspended only when the average price of Global crude reaches $80 per barrel for three months. As of Tuesday morning, Manila Time, global oil prices stood at $92.27/barrel.
Locally, oil prices increased by as much as Php0.80 per liter, also on Tuesday. This was the eighth straight week of pump price hikes for the year.
Cabinet Sec. Karlo Nograles, meanwhile, said there is no indication that Pres. Rodrigo Duterte is open to Romero’s call for a special session. Congress is currently on a pre-election break and will resume its session on May 23.
In an interview with CNBC on Friday, Dominguez said that the oil prices hitting $100 per barrel is concerning, but claims that the government is “ready.” Meanwhile, the Department of Energy is gearing up an oil contingency plan to assure enough fuel supply amid disruptions in the global market.